Latvia Scandal Places ECB Under Spotlight as Bank Supervisor

The U.S. Treasury proposed banning ABLV Bank from doing business in dollars, but the ECB doesn‘t have the power to police money laundering. It is responsible for ensuring senior bankers are up to the task of running their firms, though, and on the weekend was forced to declare the lender failing or likely to fail after depositors fled.

The Frankfurt-based institution has said it can only act when national authorities point out money laundering at banks. That stoked criticism officials are only reacting to events and have done too little, too late. And it comes at a critical time for the ECB, which is in the midst of trying to force euro-region lenders to clear their balance sheets of bad loans and facing criticism for its performance as a watchdog.